Three major Kentucky hospital systems that had their merger hopes dashed when Governor Steve Beshear rejected their proposal last week have received a reprieve as state officials indicate an altered version of the agreement might be approved.

The governor’s primary objection to the proposed deal was that the University of Louisville Hospital would no longer be state-owned once it combined with two other Kentucky health systems, Jewish Hospital & St. Mary’s HealthCare (JHSMH) and the Saint Joseph Health System, both of which are affiliates of national hospital operator Catholic Health Initiatives (CHI).

Under the original merger terms, CHI would have ended up with a 70% stake in the combined system, which would become the largest health care system in the state. CHI planned to invest $320 million in the system as part of the deal.

However, the University Hospital operates as a regional “safety net” facility, meaning it sees a large volume of charity patients, and state Attorney General Jack Conway has raised concerns over how the facility’s services would change under a Catholic parent.

Despite these challenges, the three care providers have not given up on their affiliation plans, and the governor’s spokesperson has indicated that Beshear will continue to work with the systems to come up with a new, more acceptable version of the deal. A University of Louisville representative has confirmed that a meeting with the governor will take place this week.

Whatever form the new merger agreement might take, state officials are obviously aware that some sort of change is necessary to avail the woes of the University Hospital and the JHSMH facilities, which like many systems across the US are facing hard financial times due to a rise in uninsured patients, increased competition, and other economic and market conditions.

Anne Law has been a member of the D&B editorial department for more than a decade, providing content for the Hoover's and First Research products. She currently covers the health care and insurance industries for First Research. For industry news, follow Anne on Twitter.

US Economy in February '15 | A Multi-Dimensional View by D&B

Trending Now

Executives on the Move

Calumet Rolls Out the Barrel for CEO Search

March 2015

Oil refiner Calumet Specialty Products announced last Thursday that co-founder William Grube will be promoted to executive vice chairman, leaving an opening in the CEO position. Bill Hatch, a retired CITGO executive, has been hired as the interim CEO while the company employs executive recruiter Spencer Stuart to assist in the ongoing search for a permanent CEO. Both Grube and Hatch begin their new positions on April 1.

Company Spotlight: Update of the Week

In an update last week, Dun & Bradstreet editor Adam Anderson detailed how Southwest Airlines‘ simple approach (low cost, no frills) — combined with a steep decline in fuel and oil prices — led to milestone revenue and net income in 2014. It reported revenue of $18.6 billion last year, with net income of $1.1 billion. A key to future growth for the airline is international service; in 2014 the company launched service to Jamaica, Aruba, and the Bahamas, with plans this year for service to Costa Rica and Belize, among other destinations. Follow Adam on Twitter.

First Research Trend of the Week

More millennials are choosing US trade schools over traditional four-year colleges after high school, which may ease the growing demand for skilled trade workers. As college costs soar, many students want to avoid hefty student loans debt. Trade school graduates who become electricians and plumbers can earn salaries that are as high or higher than the average college graduate’s paycheck, according to NPR. For more industry trends, please see our Education & Training Services profile.